If the lessee generally has the right to cancel the lease early, then this scenario represents a characteristic of an operating lease.

Name: If the lessee generally has the right to cancel the lease early, then this scenario represents a characteristic of an operating lease.
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Operating leases typically offer more flexibility, including the option for early cancellation, unlike finance leases which are more rigid and akin to a purchase agreement.

If the Lessee Generally Has the Right to Cancel the Lease